The Capital Of 'Saudi America' Is About To Relocate

In a new note, Goldman Sachs' Jeffrey Currie says the third
epicenter of the great American shale boom is about to reveal
itself.

Its location: West Texas' Permian Basin.

We've put his projections for all three boom hubs through 2016
into a chart (see below).

That year, the Permian will surpass both the Bakken and Eagle
Ford.

Goldman Sachs/Rob
Wile

Right now though, all three are still producing way more oil than
the country has seen in decades, and their output is likely to
saturate North American refineries so thoroughly that the federal
government may have to ease export controls (currently raw crude
cannot be shipped abroad). Currie:

"Ultimately, as US light crude production continues to grow,
exports to countries other than US and Canada might become the
next necessary step in order to avoid a shut-in of US production
as we don’t consider ‘synthetic’ medium blending in the U.S. Gulf
Coast will meaningfully absorb incremental US light supplies."

At a minimum, the discount on U.S.-traded crude contracts is
going to increase: Currie is lowering his bearish target
for WTI to $9 a barrel, from $8.50, for 2014.